§ 2121 — Release of security interest

§ 2121. Release of security interest. (a) Upon the satisfaction of a\nsecurity interest in a vehicle the lienholder shall immediately upon\nclearance of payment execute a release of his security interest in a\nmanner prescribed by the commissioner and mail or deliver the release to\nthe owner or any person who delivers to the lienholder an authorization\nfrom the owner to receive the certificate. Payment sufficient to satisfy\nthe security interest by an insurer of the owner shall be deemed an\nauthorization by the owner for the delivery of the release of the\nsecurity interest to the insurer. If the payment in satisfaction of the\nsecurity interest is in cash, certified check, intra-bank transfer of\nfunds or an uncertified check or draft issued by an insurance company\nauthorized to do business in this state, the payment shall be deemed to\nbe cleared immediately upon receipt. The owner, other than a dealer\nholding the vehicle for resale, may cause the certificate and release to\nbe mailed or delivered to the commissioner, who shall release the\nlienholder's rights on the certificate or issue a new certificate.\n (b) A dealer who receives a motor vehicle for the purposes of resale\nand who arranges for the satisfaction of any security interest in such\nvehicle, and for which a release of security interest has not been\nissued, may submit to the commissioner sufficient evidence to\ndemonstrate that such security interest has been satisfied and shall\nprovide notice to the lienholder two weeks prior to submission to the\ncommissioner. The commissioner shall, upon receipt of such evidence, a\nproper application and the appropriate fee pursuant to section\ntwenty-one hundred twenty-five of this article, promptly issue, within\nno more than fifteen business days of receipt by the department of all\nrequired information and fees, either a duplicate certificate without\nsuch lien included thereon, or a certificate without such lien included\nthereon. Evidence that a security interest has been satisfied shall\ninclude: (i) evidence that an interbank or electronic transfer of funds\nhas been made; or (ii) evidence that a copy of a cashier's or bank check\nhas been delivered; or (iii) other evidence as determined to be\nsatisfactory by the commissioner; and (iv) evidence that the amount\ndelivered to the lienholder is equal to the amount which has been\nrepresented to the dealer by the lienholder as sufficient to satisfy\nsuch lien. Such evidence shall be accepted by the commissioner as\nsufficient. Any evidence submitted to the commissioner pursuant to this\nsubdivision may, subject to approval of the commissioner, be submitted\nin electronic form. In addition to the penalties imposed by section\ntwenty-one hundred thirty of this article, any dealer who alters or\nforges evidence of payment, or fails to make a payment, shall be liable\nto any party for any damages resulting from the issuance of a new\ncertificate by the commissioner, plus attorney's fees and costs incurred\nin recovering such damages, provided however no subsequent purchaser of\na vehicle where the security interest was removed by the commissioner\nunder the provisions of this subdivision shall be liable for any errors\nin the removal of such security interest, and any dealer who so applied\nfor the removal of such security interest on such vehicle shall\nindemnify any such purchaser and lienholder. The commissioner is\nauthorized to adopt and enforce reasonable rules and regulations\nnecessary to carry out the provisions of this subdivision.\n